TANF's Role in Expanding Economic Opportunity

Below is an excerpt from Julie Strawn's April 22 testimony before the U.S. House Ways and Means Subcomittee on Income Security and Family Support. The subcomittee hearing focused on the role of education and training in the TANF program.

Past welfare reform debates have often centered on the question of which route is more effective to economic independence, education or work. I've followed research and practice in this area for more than 20 years, and it now seems quite clear that the answer to the education or work question is yes. Both education and work experience are critical for economic success.

It seems just as clear that it is not always possible for people to be good students, workers, and parents all at the same time, given the daunting logistical, financial, and time requirements of each of these roles. It is time to put aside old debates and start a different conversation that grapples with today's realities.

Changes in our economy have made it increasingly hard for workers with only a high school education or less to earn enough to support a family. Workers without even a high school diploma have been especially hard hit. According to administrative data, 41.5 percent of adult TANF recipients have less than a high school degree, and more than half have exactly a high school degree. Less than 5 percent have any postsecondary education.

Fortunately, education and training services for adults are adapting to respond effectively to the changing economy and today's worker and employer needs. Leading states and communities are creating new pathways to careers for lower-skilled adults and combining them with the financial support and advising services that low-income adults, especially parents, need to succeed. Federal policies across a range of programs need to be updated to support these reforms.

Unfortunately, TANF policies are more often part of the problem than the solution.Federal policies, especially the work participation rate calculation, force a preoccupation with the minutia of program participation rather than attention to the long-term economic outcomes we want to achieve for low-income families. While a few states manage to provide effective education and training services for low-income parents in spite of federal policy barriers, their achievements are the exception, not the norm. Too many states are frozen in the policies they adopted in the mid 1990s and have not recognized the ways in which both the economy and educational systems have evolved over the past decade and a half.

A changing economy

The first new reality that TANF policies need to address is the changing structure of our economy over the last twenty years, which has placed a growing premium on education and training beyond high school. Those who have at least a two- or four-year college degree have seen their earnings hold steady while the earnings of those with only a high school diploma have dropped substantially. High school dropouts are the worst off. Their earnings have fallen almost by half. For students at community colleges, where working adults are especially likely to enroll, a postsecondary education especially pays off for those who pursue education or training in high-wage fields, such as health care, science, and engineering, or for those who transfer and go on to complete four-year degrees.

This increasing demand for skilled workers is expected to continue. Between 2008 and 2018, almost 30 million new job opening (64 percent) will be filled by workers who have at least some postsecondary education and training, whether that is an occupational certificate, diploma or degree.

Education matters. And since one of the biggest costs of pursuing credentials is the loss of earnings and work experience while in school, a poor job market as we have now can be a good time for workers to improve their skills, if they can obtain financial help to meet their basic living expenses while they do so. Both the federal government and many states are taking steps to support workers who are unemployed in returning to school to improve their skills so they can qualify for the jobs of tomorrow; however, most TANF agencies are still enforcing policies that were designed for an economy where jobs were plentiful.

There is a broad consensus that parents should work to provide economic support for their families. There is an equally strong consensus that today's economy requires some education or training beyond high school to qualify for many family-supporting jobs. As Congress prepares for the upcoming reauthorization of TANF, it is critical that it strengthens TANF both as a safety net and as a pathway to opportunity.